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Marcia Tate-Small, Cassandra Thomas, and Robin Ledger-Ryan v. Saks Inc.

May 31, 2012


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge:


Defendants Saks Incorporated, Saks Fifth Avenue, Inc., Saks & Company, and Saks Fifth Avenue Off Fifth ("Defendants" or "Saks") move pursuant to the first-filed rule to dismiss or, in the alternative, to transfer or stay this action because of a similar suit now pending in a district court in California. For the following reasons, the motion is GRANTED, and this action shall be TRANSFERRED to the Northern District of California.


A.The California Action (The Till Action)

On February 2, 2011, Dawn Till and Mary Josephs, individually and on behalf of all others similarly situated, filed suit in the Northern District of California, No. 11-CV-00504-SBA, asserting that they and other Saks managers were improperly classified as exempt from overtime in violation of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. ("FLSA"), and the California Labor Code, Cal. Labor Code § 500, et seq. ("CLC"). The Till plaintiffs, in their complaint, defined a purported FLSA collective action*fn1 as "all persons who are or have been employed by defendants as Assistant Managers at Saks Off Fifth stores, within the United States." Defs.' Supp. 3. Defendants moved affirmatively to deny collective treatment. The Till plaintiffs moved pursuant to Rule 23 of the Federal Rules of Civil Procedure to certify a class action*fn2 for the CLC state claims. These two motions are fully briefed, but the Till court has yet to rule on them. The Till plaintiffs are represented by the same counsel here, and counsel notes that they have abandoned their FLSA collective action in California, leaving in the Till case only the FLSA claims for the individually named plaintiffs and the putative CLC class action. Pls.' Opp'n 9. Plaintiffs' counsel further suggests that their abandonment of the FLSA collective action renders moot Saks' affirmative motion to deny collective treatment, id., though it remains unclear to me whether the California court will decide the motion or not.

B.The New York Action (The Tate-Small Action)

On February 8, 2012, the day after Defendants submitted their last brief in connection with the pending motions in Till regarding certification, Marcia Tate-Small, Cassandra Thomas, and Robin Ledger-Ryan, individually and on behalf of all others similarly situated ("Plaintiffs"), filed suit in the Southern District of New York by and through the same counsel and against the same Defendants as in the Till action. Plaintiffs assert claims under the FLSA (defining an identical collective class as in Till), the New York Labor Laws, N.Y. Labor Law § 199, and New York State Labor Department's Codes, Rules and Regulations, N.Y. Comp. Codes R. & Regs. tit. 12, § 142-2.2. Plaintiffs will further seek certification of a Rule 23 class action for the New York state claims. On March 6, 2012, Defendants filed the present motion, and the Court heard oral argument on May 16, 2012.


The first-filed rule gives priority to the earlier of two competing lawsuits*fn3 and "'applies when identical or substantially similar parties and claims are present in both courts.'" Pippins v. KPMG LLP, No. 11 Civ. 0377(CM), 2011 WL 1143010, at *2 (S.D.N.Y. Mar. 21, 2011) (quoting In re Cuyahoga Equip. Corp., 980 F.2d 110, 116--17 (2d Cir. 1992)). "The Second Circuit recognizes two circumstances that warrant departure from the first-filed rule: (1) where there are 'special circumstances,' and; (2) where the 'balance of convenience' tilt in favor of the second forum." Id. (citing Emp'rs Ins. of Wausau v. Fox Entm't Group, Inc., 522 F.3d 271, 274 (2d Cir. 2008)). "Special circumstances" include "manipulative or deceptive behavior" (such as where the first lawsuit is an improper anticipatory declaratory judgment action) or where "forum shopping alone motivated the choice of the situs for the first suit." Emp'rs Ins.of Wausau, 522 F.3d at 275--76 (internal quotation marks omitted). The "balance of convenience" factors are "essentially the same as those considered in connection with motions for transfer of venue pursuant to 28 U.S.C. § 1404(a)." Id. at 275 (internal quotation marks omitted).*fn4

A.The Till Action and the Tate-Small Action Are Substantially Similar

The two state-based class actions involve similar factual issues pertaining to the same defendant. A significant amount of the discovery already completed in the Till action will be applicable and available in this case. Defs.' Reply 2--3. These similarities alone, however, are usually not sufficient to find that the two cases are substantially similar. See, e.g., Wilkie v. Gentiva Health Servs., Inc., No. CIV. 10-1451 FCD/GGH, 2010 WL 3703060, at *4 (E.D. Cal. Sept. 16, 2010) ("[N]o subclass of California litigants, alleging California state law claims, currently exists in the [New York] action so there can be no similarity of the parties as to the state classes."); Gardner v. GC Services, LP, No. 10-CV-997-IEG (CAB), 2010 WL 2721271, at *5 (S.D. Cal. July 6, 2010) (finding "no overlap at all, much less 'substantial overlap[,]'" where a later-filed action represented a California putative class, while the earlier-filed action excluded all California employees from the putative class). The plaintiffs in each suit seek to certify a class action specific to California and New York, respectively. With the possible exception of the rare employee who has worked in stores in each state, there will be no overlap among plaintiffs between the class actions.

Additionally, there are notable differences in the law that will apply to each. Both New York and federal wage law require employees working more than forty hours per week to be compensated for overtime work at a rate of one-and-a-half times their standard rate. 29 U.S.C. § 207(a)(1); N.Y. Labor Law § 650, et seq.; N.Y. Comp. Codes R. & Regs. tit. 12, § 142--2.2 (expressly adopting the provisions and exemptions of the FLSA). However, employees properly classified as "bona fide executives" are exempted. See 29 U.S.C. § 213(a)(1); N.Y. Labor Law § 651(5)(c). Because New York's overtime provisions mirror or expressly adopt federal wage law, federal courts evaluate New York's executive exemption by reference to the FLSA and its attendant regulations. See Zheng v. Liberty Apparel Co., 355 F.3d 61 (2d Cir. 2003); see also Torres v. Gristede's Operating Corp., 628 F. Supp. 2d 447, 456 n.4 (S.D.N.Y. 2008) ("New York's overtime provisions expressly incorporate the FLSA exemptions."). The determination of whether an employee is exempt from the overtime requirements of the FLSA is a "highly fact-intensive inquiry that must be made on a case-by-case basis in light of the totality of the circumstances." Johnson v. Big Lots Stores, Inc., 604 F. Supp. 2d 903, 908 (E.D. La. 2009) (citations omitted); see also Barfield v. N.Y. City Health and Hosps. Corp., 537 F.3d 132, 141-- 42 (2d Cir. 2008) ("[E]mployment for FLSA purposes [is] a flexible concept to be determined on a case-by-case basis by review of the totality of the circumstances." (citation omitted)). "The regulations . . . provide a non-exclusive list of characteristic 'management' activities to which a court may look to determine whether an employee's 'primary duty is management.'" See Myers v. Hertz Corp., 624 F.3d 537, 548 (2d Cir. 2010), cert. denied, 132 S. Ct. 368 (2011) (citation omitted).

Under California law, in contrast, employees receive overtime compensation for all hours worked in excess of eight hours in a workday, forty hours in a workweek, and the first eight hours of a seventh consecutive workday. See CLC § 510. And the comparable administrative employee exemption-found in IWC Wage Order No. 2001.4-applies where fifty percent or more of an employee's time is spent on exempt activities. See Cal. Code Regs. tit. 8, § 11040(1)(A)(2)(f) ("The work actually performed by the employee during the course of the workweek must, first and foremost, be examined and the amount of time the employee spends on such work . . . shall be considered . . . ."); see also Ramirez v. Yosemite Water Co., Inc., 978 P.2d 2, 10 (Cal. 1999) ("[California law] requires only more than 50 percent in exempt activities in order to qualify [for exemption]."). "The (in)correctness of putative class members' designation as exempt can only be determined through individual inquiries investigating the amount of time each member spent on exempt activities . . . ." Ruggles v. WellPoint, Inc., 272 F.R.D. 320, 343-- 44 (N.D.N.Y. 2011).

The difference between these standards-the qualitative test under the FLSA or the NYLL and the quantitative test under the CLC for the exemption, as well as differences in the calculation of overtime hours under each-may have some effect on the decision of whether to certify the respective collective and class actions. Both standards will require ...

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